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"I expect the aid programme for Cyprus will be in place by the end of March", Asmussen said, adding that politicians in his native Germany should not try to delay a controversial decision on Cyprus until after a German federal election in September. "There must be no doubt about this: if Cyprus gets no external help, it will slide into default."
He also warned that failing to help a systemically relevant euro zone country would "put at risk progress made last year on the euro crisis - and that would have high financial and political costs".
Asmussen said an aid package for Cyprus would be "no one-way street" and the government in Nicosia would have to fulfil "tough conditions", including scaling down its financial sector and introducing more banking transparency.